October
23, 2003
Wall Street sees bright
horizon for Venezuela
By Hugh Bronstein
(Reuters) - International investors have
given Venezuela a surprising vote of trust by
buying bonds from this country with a lot of enthusiasm.
Investors see a country flooded with money from
oil exports and an increasing reputation of professionalism
on debt management.
"Even when
the price of Venezuelan bonds has increased a
lot, they still have space to grow", declared
José Cerritelli, a foreign debt analyst
from Bear Stearns. Should investors keep on buying
bonds from this debt? "Absolutely" said
Cerritelli.
The differentials
of Venezuelan bonds, which measure the risk of
non-complying with payments compared to that of
the United States Treasury, have been reduced
from 1.127 basic points at the beginning of this
year to 760 basic points, which has helped the
performance of the emerging market in general.
By making its
come back to the international market with a series
of debt issues destined to extend the payment
of their government's debt, Venezuela has showed
that it can have access to international financing
whenever it needs it.
Some fear that
a heavy drop in oil prices could trigger once
again the debt differentials, but the forecasts
about worldwide oil demands put an end to those
fears.
Jim Barrineau,
from Alliance Capital Management, agreed on the
fact that Venezuelan bonds could keep behaving
better than the rest of the market. Total returns
in the country have increased by 24.2% this year.
